Congress went on vacation for the long Memorial Day weekend without voting on an extension of unemployment benefits. Apparently, it is dawning on members of both parties that the costs of ceaselessly extending unemployment benefits may outweigh the benefits. But in the meantime, the delay is going to hurt in California where unemployment claims in April hit a record high 768,709. “The Senate didn’t get around to the extension bill, because now many people on both sides of the aisle are questioning whether the government should or even can go on extending benefits. The bill on the floor violates Pay-Go (again), and borrowing money to fund the jobless means heavier taxes and fees down the road. The pricing signals contribute to pessimism in the investor class, which in turn depresses opportunity for growth.”
The division between those who want the government to “solve” unemployment by extending jobless benefits and passing a new jobs bill, and those, who understand government intervention in these matters only serves to retard any economic recovery are only getting more fierce.